I don't know how the GNS receiver works, but the software mentioned here, Navigon and MotionX, both look for the GPS in a way that the WiFi only iPad doesn't support, so the software won't install.
I don't think that this statement is correct. I am pretty sure that the GNS BT GPS inputs the data into Loction Services, which is where all GPS apps look for GPS data.
Other BT GPS receivers use the BT Serial Profile which the iPad does not support. To use them, you need to jailbreak the iPad and install a BT stack that supports the Serial Profile.
I can only assume that Apple has implemented a "Location Services" BT Profile rather than use the Serial Profile that everyone else uses and that GNS has catered for this.
As I understand it, Location Services uses the best method available data source to provide location coordinates to apps. Normally, on the WiFi only iPad, this is based on a database of WiFi Mac addresses which only works if you are within range of WiFi routers. When you use the GNS receiver, Location Services will recognise it and use it, even on the WiFi only iPad.
The the problem is that some GPS app suppliers have assumed that if you don't have the 3G model, you can't get GPS data. Presumably they are thinking of Google Maps etc which download map data as required. Possibly they also consider that the iPad GPS receiver is part of the 3G chipset and that, if this is not present, there must be no GPS data. Their installer refuses to proceed if it doesn't detect 3G hardware, an unnecessary restriction.